Financial cards include non-stored value cards, such as credit cards and charge cards, as well as debit cards. A credit card is part of a system of payments named after the small card (typically plastic) issued to users of the system. It is a financial card entitling its holder to buy goods and services based on the holder's promise to pay for these goods and services. The issuer of the credit card grants a line of credit to the card owner (also referred to herein as the user) from which the user can borrow money for payment to a merchant or as a cash advance to the user.
A credit card allows the user to revolve their balance at the cost of having interest charged. A credit card is different from a charge card as a charge card requires the balance to be paid in full each month. Most credit cards and charge cards are issued by local banks or credit unions, and are the same shape and size as specified by the ISO 7810 standard.
A debit card (also known as a bank card or check card) is a card which provides an alternative payment method to cash when making purchases. Functionally, it can be called an electronic check, as the funds are withdrawn directly from either the bank account from the remaining balance on the card. Debit cards are issued in the name of individual account holders while stored value cards are anonymous.
Debit cards, credit cards, and charge cards, as well as other non-stored value cards, are issued after an account or application for an account has been approved by the institution providing the card. After receiving the card, the user may use the card to make purchases at merchants accepting that card.
Card security relies on the physical security of the card itself as well as the privacy of the credit card number. Therefore, whenever a person other than the card owner has access to the card or its number, security is potentially compromised. Card fraud refers to theft and fraud committed using a credit card, charge card, debit card, or any similar payment mechanism as a fraudulent source of funds in a transaction. The purpose may be to obtain goods without paying or to obtain unauthorized funds from an account. Card fraud is also an adjunct to identity theft.
In issuing a financial card to the user, the card is mailed directly to the user. The mailing of the financial card is a highly insecure process. The card may be intercepted in the mail by someone other than the true card owner, thereby increasing the likelihood of card fraud and identity theft.